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jeffpalumbo

Verizon’s Interactive Video Sharing Service and Mobile Social Network

Thursday, November 20th, 2008

FunMobility, a leading provider of innovative wireless community and media services, today announces the launch of America’s Best Mobile Flix(TM) (aFLIX), the first interactive video sharing service and mobile social network, on Verizon Wireless. aFLIX will enable Verizon Wireless customers to easily create unique mobile video experiences and share user-generated content with other mobile phone users across multiple carrier networks.

Using aFLIX, Verizon Wireless customers who have phones with video capabilities may share their mobile videos as life happens. Customers can upload videos into categories such as Comedy, Kids Vids, Crazy Pets, Sports Hijinks, and many more, or create a profile with their videos and share public or private messages with other members. Customers can also review, comment, rate and share every video on aFLIX right from their mobile phone. Videos with higher ratings are featured in a special “best videos” category every month, and customers are automatically presented with the highest-rated video they have not yet seen when they open the aFLIX application on their phones.

“Today’s mobile consumer demands creative freedom and giving them the tools to generate their own media is the next step in broadening and deepening their mobile experiences,” said CEO of FunMobility, Adam Lavine. “aFLIX represents the next evolution of mobile media creation, giving users the ability to point, click, and immediately share their personal videos with millions of others.”

“Today’s mobile phones give our customers the flexibility and opportunity to create their own media,” said Barry Ross, associate director, Digital Media at Verizon. “Our relationship with FunMobility is focused on helping our customers do that, and we’re thrilled to offer a greater selection of personalization options and applications like aFLIX, which lets them capture some of their favorite moments on video and share those experiences from almost anywhere.”

The FunMobility aFLIX service will run alongside its existing America’s Best Mobile Pix application (aPix), FunMobility’s popular photo sharing service that generates over 20 million mobile impression votes per month. FunMo.com, will power the aFLIX application, which can be downloaded directly from Get it Now or Media Center for a $4.99 subscription. Additionally, aFLIX is available on FunMobility’s direct-to-consumer website at http://www.funmo.com.

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Posted in Social Media, Social Networks | No Comments »

jeffpalumbo

New MTV series 4Real (.com) debuts

Thursday, November 20th, 2008

Sol Guy stands next to a needle drop-box in a Downtown Eastside alley, and nods to two men dumpster-diving a few metres away.

He’s retracing a scene from an episode in his new MTV series, 4Real, in which he and Hollywood starlet Eva Mendes examine the troubled neighbourhood’s issues, from drug addiction to homelessness.

“We were picking up needles and putting them in here,” said Guy, 33, raising his eyebrows and smiling at the graffiti-covered box.

The series, which Guy hosts, kicks off tonight at 7:30 p.m. on CTV with the first of four “sneak peak” episodes. The entire series, including the Vancouver-based episode, will air in March on MTV in Canada.

In each show, a celebrity — including Mendes, Joaquin Phoenix and Cameron Diaz — travels to meet with local leaders and activists in developing countries, war zones, remote villages and slums.

Phoenix visits an indigenous tribe in the Amazon. Diaz meets a medicine man in Peru. U.K. rapper M.I.A. heads to Liberia to meet a children’s rights advocate. Hip-hop star, K’naan, visits the largest slum in East Africa with a local aid worker.

Vancouver’s Downtown Eastside seemed a good fit, said Guy.

“It’s the poorest postal code in Canada and it’s like, yo, we can do better than that as a city,” said Guy. “We have to examine collectively why that place exists, where have we failed?”

The Vancouver episode focuses on health advocate Liz Evans and her work with the Portland Hotel, which has a number of outreach programs for people in the area. While filming in October, Mendes worked in the hotel’s kitchen and joined volunteers at night, collecting used needles in alleys.

“I’ve completely been educated,” Mendes said of her experience. “We can’t look the other way, nor should we look the other way.”

Guy said the experience made him examine his own stereotypes, something he hopes the audience will also do. “I just hope that people in Vancouver recognize the beauty of the people [in the Downtown Eastside] and they’re not to be ignored.”

Josh Thome, 35, an environmental and social activist, created the series with Guy. The childhood friends, who went to elementary school together in Grand Forks, began brainstorming about the series five years ago. They spent two years travelling together before deciding on the format, then creating a pilot. Thome said he hopes the series inspires people to action. “We’ve come so far, but I feel we’re at the starting line,” Thome said in an interview Sunday.

He said the website for the show, www.4Real.com, is important to connecting the audience to issues. It includes background on the people and areas the series features and it is linked to Vancouver-based online giving group, www.givemeaning.com, so people can donate funds.

Thome said he’s particularly proud of the Downtown Eastside episode, to air in March. “It shows you don’t need to travel around the world to find inspiring leaders or issues that need addressing,” said Thome. “You can literally look outside your door.”

Fifty per cent of any profits the show makes will be given to the community leaders and groups including the Portland Hotel, said Guy. “I don’t want to find myself taking advantage of anyone,” he said. “They’re part of it too.”

Go t
o www.4Real.com to learn more.

4Real is an excellent original content create to generate awareness for charitable efforts.

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Posted in Charity Innovators, Charity Social Network Initiatives, Social Media, Social Networks | No Comments »

jeffpalumbo

From global village to a local village

Thursday, November 20th, 2008

One of the most interesting new ones is qype.com, which models itself on the highly successful yelp.com of the US. Qype started last June as a pan-European site that claims 500,000 visits a month in the UK and is growing at 50% every two months. Rob Hinchcliffe, its UK community manager, claims people are moving away from “time-suck” networks such as Facebook towards socially useful ones that “help make our lives easier as well as fostering online networks and micro communities”. I was impressed that there were seven reviews of a local curry restaurant. From this week, he says, users will be able to post YouTube videos of restaurants or clubs they are reviewing. It also has a stripped-down option for small-screen phones in which you simply insert a street or postcode and what you are looking for.

Interesting contenders include welovelocal.com (which I have already reviewed); trustedplaces.com, which is building up reviews from users; and outside.com, which homes in on postcode data from local galleries to Burke’s Peerage (though typing postcodes into Google can be just as good). Mygamma.com, which has been nominated for a Best Mobile Social Networking award, looks promising but kept sending me back to a mobile gaming site, which was disconcerting.

Another one, gypsii.com, which has just landed a contract with China, was slow to load but looks interesting: you select where you are and it tells you how far other restaurants, interesting houses etc are with user-generated photos - though it had a disconcerting habit of producing restaurants thousands of miles away. Others include, touchlocal.com (where, in theory, you can read others’ views of local plumbers), toptable.co.uk, beerintheevening.com, plus, of course all the local interest you can find on our own Guardian sites such as guardianrestaurantbookings.co.uk. And all this is without mentioning Google’s as yet unrevealed plans to capture this space for itself.

Posted in Uncategorized | No Comments »

jeffpalumbo

Marketing Executives Networking Group Survey Finds Social Media Practices Still in Infancy Stages

Thursday, November 20th, 2008


There is Opportunity for Growth in Web 2.0 Practices; Most Marketers Still on Learning Curve

 

Despite the fact that many marketers feel like they are losing the race to adopt social media practices, the Marketing Executives Networking Group (MENG), today announced the findings of their social media membership survey which reveals most marketers are still in the early or experimental phases of adopting and measuring social media. The premier organization of executive-level marketing professionals conducted the survey last month and found that 67% of respondents consider themselves beginners at using social media for marketing purposes. Additionally, more than 87% of respondents are not regularly measuring the ROI of their social media marketing efforts.

“Our members are excited about the potential of social media, but most have not yet fully integrated social media practices into their traditional marketing efforts,” says Richard Guha, Chairman of MENG. “While many marketers are worried they’re missing the boat, in reality even the Fortune 500 companies don’t feel they’ve mastered social media just yet.”

The survey was conducted to gauge the role of social media in today’s marketing practices, and nearly 75% of respondents define social media as media that is based on conversations among users. While more than 67% report they will increase their social media advertising budget in 2009, nearly 80% say social media is not a fully integrated component of their marketing programs.

“Many marketers are unsure where to start with social media,” said MENG member Dwight Griesman, Chief Marketing Officer at Forrester Research. “It’s important to make the decision on what to do based on your target audience and your strategy, not the technology. As noted in Forrester’s book Groundswell: Winning In A World Transformed By Social Technologies (Harvard Business Press, 2008) following the four step POST process provides marketers with a framework for leveraging social media to achieve their goals. The first three steps cover People, Objectives, and Strategy. Only then does Technology factor in. Focusing on the audience first is the right place to start as marketers formulate their approach to social media.”

“An important thing to remember is the initial foray into social media should always begin with listening to your consumers,” said MENG member Bert DuMars, Vice President E-Business & Interactive Marketing at Newell Rubbermaid. Newell Rubbermaid’s Graco brand implemented a social media strategy designed to humanize and increase positive perceptions of the brand. “Ask them how they would like to engage with your brand, find the communities where they are already active, and immerse yourself in the social networking environment. Also, always be transparent to your consumers, and remember it is a conversation not an interruption…and always start with listening.”

Earlier this year MENG launched Social Media University, a webinar series designed to help MENG members brush up on social media tools like RSS feeds and podcasts. The webinar series, designed to help members take advantage of current trends, was one of the highest-attended this year. In addition, local chapters are also seeing record attendance at meetings led by social media experts.

“It’s encouraging to see MENG members collaborating and participating in hands-on sessions that advance their knowledge of social media,” Guha said. “It’s this collaboration and sharing of best practices and campaigns that will show some members how to get started or take the next step and help us all to gain a better understanding of how to leverage the techniques and determine the results.”

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Posted in Social Media, Social Media Research, Social Networks | 1 Comment »

jeffpalumbo

Stealth Startup Kango Working on Semantic Search For Travel

Thursday, November 20th, 2008

picture-224.pngDoes the world really need another travel site? With Expedia, Orbitz, Travelocity, TripAdvisor, Farecast, TripHub, Yapta, and many more, prospective travelers already have more than enough to choose from. (With an estimated $87 billion in travel booked online, it’s no wonder why). Soon they will be able to add Kango to that list.

The startup, which has been in stealth-mode until now, does manage to add a new twist to search travel. It is indexing 18 million opinions and reviews across 1,000 travel-related sites to derive the best travel search results based on what type of trip you want to take. If you are planning a romantic getaway in Big Sur, you will get one set of results. If you specify that you are looking for a family outing instead, you will get another. Or you can look for pet-friendly hotels and activities. Of course, you can also search by price or amenity, like any other travel site. And you can see where each hotel or activity is located on a small Google Map.

picture-204.pngBut what’s promising about Kango is the way it slices up search subjectively. Kango is building a semantic search engine focussed narrowly on travel. It parses the language in all of those reviews and guides, and categorizes them by generating tags for them. “You cannot wait for users to add tags, you have to derive them,” says CEO Yen Lee. So hotels that have been reviewed across the Web (on sites like Yahoo Travel, TripAdvisor, or Yelp) with words such as “perfect,” “relaxing,” “couples,” “honeymoon,” or “spa” would rank higher in a search for romantic travel. Hotels associated with the words “kitchen,” “pool,” and “kids,” would rank higher in a search for family trips.

Whether this will be enough to draw people from other travel sites is hard to say at this point. But Kango’s executive team has an impressive pedigree. Lee is a former general manager of Yahoo Travel. His search architect, Huanjin Chen, used to be the search architect at eBay. His natural-language search scientist, Boris Galitsky, used to do work for the British government. And his head of marketing, Elliott Ng, headed up marketing for Intuit’s QuickBooks and is the founder of Netcentives.

Lee estimates there are 6 billion to 8 billion travel-related searches done every year, and he thinks Kango can help expose more of the hidden gems in travel that today don’t quite make it to the first page of most travel sites. He plans to make money on travel-specific search advertising, rather than on booking or listing fees.

Kango will be rolling out a limited beta in the next few weeks, and is rese
rving 100 spots for TechCrunch readers who sign up here.

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Lightspeed Venture Partners Blog

Semantic web in travel

Posted: 25 Feb 2008 07:30 PM CST

 

 

I saw today that Radar raised a Series B for its semantic web application. As I’ve noted in the past, I am a believer in approaching the semantic web top down rather than bottom up, i.e. by inferring structure from domain knowledge rather than requiring all websites to mark up their content in RDF. The user doesn’t care about the semantic web (just as they don’t care about wikis or web 2.0 or tagging), all they care about is that they can more quickly get to the things that they want. The mechanisms that we use to create this better experience should be invisible to the user.

Two companies that are taking this approach are doing it in travel. Travel is a good vertical to start in for three reasons (i) lots of users (ii) well defined universe of data and (iii) easy to monetize.

The first of these is Tripit. Tripit takes travel confirmation emails from multiple sources and creates a master itinerary. As Mike Arrington noted in Techcrunch:

It’s dead simple to use and it keeps you organized - all you have to do is forward confirmation emails to them when you purchase airline tickets, hotel reservations, car rentals, etc. Tripit pulls the relevant information out of the emails and builds an organized itinerary for you. You can send emails in any order, for multiple trips, whatever. It just figures everything out and organizes it.

This is a great example of the semantic web being used to improve a users experience, invisibly. The user neither knows nor cares that Tripit is inferring structure from the emails (e.g. SFO is an airport in San Francisco, the Clift is a hotel in San Francisco, and since your reservation at the Clift starts on the same day as your arrive into SFO, Tripit will offer driving directions automatically from SFO to the Clift etc). All the user knows is that they automagically have a single itinerary compiled and supplemented with other relevant information (e.g. maps, weather etc).

The second is Kango. Kango helps travelers decide where they want to go by crawling 10,000 sites and 18,000,000 reviews and organizing that content semantically. As Erik Schonfeld of Techcrunch notes:

But what’s promising about Kango is the way it slices up search subjectively. Kango is building a semantic search engine focussed narrowly on travel. It parses the language in all of those reviews and guides, and categorizes them by generating tags for them. “You cannot wait for users to add tags, you have to derive them,” says CEO Yen Lee. So hotels that have been reviewed across the Web (on sites like Yahoo Travel, TripAdvisor, or Yelp) with words such as “perfect,” “relaxing,” “couples,” “honeymoon,” or “spa” would rank higher in a search for romantic travel. Hotels associated with the words “kitchen,” “pool,” and “kids,” would rank higher in a search for family trips.

Again, the semantics are being applied in a way that is invisible to users. Users don’t need to know how key words in reviews are mapped to characteristics like “family” or “romantic”. The company uses its domain knowledge to make this transparent to the user.

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Posted in Social Media, Social Media Research, Social Networks | No Comments »

jeffpalumbo

Online Research Drives Offline Sales

Thursday, November 20th, 2008

Any retailer who isn’t using the online channel to promote offline sales—as well as online sales—is missing a sizable opportunity.

”Today, online consumers think nothing of shopping across a retailer’s stores, Web site and catalog,” says Jeffrey Grau, eMarketer Senior Analyst and author of the new report, Multi-Channel Retailing, “As a consequence, online product research is driving more in-store sales than online sales.”

Last year, eMarketer estimated that store sales influenced by online research totaled $471 billion. Comparatively, retail e-commerce sales were only $136 billion.

US Web-Influenced Retail Store Sales vs. Retail E-Commerce Sales, 2007 & 2012 (billions and CAGR*)

Looked at another way, for every $1 in online sales, the Internet influenced $3.45 of store sales.

”Online consumers are becoming precision shoppers,” says Mr. Grau. “They are availing themselves of the wealth of information resources online to discover and evaluate products, compare them and find where they can be purchased.”

Mounting research shows that a significant percentage of store purchases are influenced by online product research.

In addition, the “eHoliday Mood Study,” conducted during last year’s holiday shopping season by Shop.org, showed that 63% of US online buyers made their holiday purchases in two or even three retail channels.

Primary Holiday Shopping Retail Channel Used by US Online Buyers, November 2007 (% of respondents)

The percent of respondents who used more than one channel would have been even higher if consumers who researched products in one channel then bought them in another were included.

According to eMarketer estimates, combined Web-influenced store sales and retail e-commerce sales accounted for 15% of retail sales in 2007. By 2012, the percentage will nearly double to 28%.

US Web-Influenced Retail Store Sales and Retail E-Commerce Sales As a Percent of Total Retail Industry Sales, 2007-2012

Forrester Research, in contrast, reported that Web-influenced store sales plus e-commerce sales accounted for 27% of retail sales in 2007—almost twice eMarketer’s estimate.

”As much a
s online shopping is a convenience and the online shopping experience continuously improves, people are not about to abandon stores anytime soon,” says Mr. Grau.

So if your cross-channel marketing capabilities are still in the early stages of development, don’t despair. As Mr. Grau says, “The majority of multi-channel retailers still have work to do to resolve organizational and IT issues that stand in their path.”

Find out more about how online is influencing offline sales, download the new eMarketer report, Multi-Channel Retailing, today.

 Cake Financial Now Lets You Track Your Friends’ Stock Portfolios on Facebook

Posted: 25 Feb 2008 06:01 PM CST

Of all the apps on Facebook, here is one that might actually make you money—depending on how smart your friends are. Cake Financial, a social finance site that lets you track and share the performance of your actual brokerage accounts, just launched its Facebook app. The app lets you compare your real stock-picking prowess to that of other Facebook members who install it on their profile pages. These are not fantasy portfolios. They show your actual returns in percentage terms (no dollar amounts are revealed), and let you compare your returns with that of your friends across brokerage accounts. Every time you or a friend makes a trade, it shows up in your feed. Talk about timely information.

Cake Financial launched at the TechCrunch40 conference last year. Since then, nearly 10,000 members have signed up who track portfolios collectively worth about $1 billion. CEO Steve Carpenter hopes that Facebook will help Cake Financial grow faster.

The potential power behind Cake—as with other social finance sites like Covester, SocialPicks, and Motley Fool CAPS—is the ability to follow the best stock pickers no matter who they are (amateur or pro). Carpenter has plans to create exchange-traded funds (ETFs) that mimic the portfolios of each of the top five percent members on Cake. It would be a personal ETF. He is still working through the details. But imagine if one of your friends on Facebook was in that elite group and you could automatically start trading alongside him. Would you do it?

 

 

CrunchBase Information

Cake Financial

Covestor

SocialPicks

Information provided by CrunchBase

 

 

Online advertising executives love talking about “engagement”: It is not the impressions or clicks that count, it is how many people who saw your ad and actually ended up doing something about it. In a speech today Brian McAndrews, Microsoft’s senior vice president of Advertiser & Publisher Solutions, announced the beta of a new way to measure the effectiveness of ad campaigns that Microsoft is calling “Engagement Mapping.” Instead of measuring clicks or impressions, engagement mapping aims to track how many times a person comes across an ad on the Web, and correlate that to actions taken down the line. So if you see an ad on Facebook for a Visa card, and then on three other sites before you click through to sign up, Microsoft will give Facebook some credit for that eventual customer engagement.

In theory, it sounds good. We all know that clicks can be gamed. But at least clicks are a straightforward measure. Microsoft is vague about what exactly its unit of engagement will be—some combination of “the impact that recency, frequency, size and ad format (such as rich media and video) have on a consumer’s online path to action.”

It sounds complicated. Why not just measure the action you want the ad to trigger? Charging advertisers for engagement is certainly the right direction, but advertisers need to know what they are buying. In practice, measuring “engagement” may be nothing more than a way to justify the value of under-performing ads. “See, that Facebook ad actually worked—three weeks later.”

In the end, it doesn’t really matter what tortuous path a customer takes before deciding to buy something. Either Microsoft’s advertising platform will produce a better return on investment than the competition (Google) or it won’t. Advertisers won’t care how it does it. They will just care whether Microsoft’s ads measure up to Google’s.

Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily.

 

 

Glam Media gathers $84.6M for women’s portal and ad network

Posted: 25 Feb 2008 03:44 PM CST

Online media startup Glam Media Inc. raised $84.6 million in a Series D funding round to help it roll up additional content sites and expand an ambitious publishing model that combines elements of a portal and advertising network.

The Brisbane, Calif., company, which said its expects this round to be its final, turned to German publishing giant Hubert Burda Media Holding GmbH & Co. as lead investor in the deal, joining London-based hedge fund GLG Partners LP and previous investor Duff Ackerman & Goodrich LLC of San Francisco. Other previous investors include Accel Partners of Palo Alto, Calif., Draper Fisher Jurvetson of Menlo Park, Calif., and Walden Ventures Capital of San Francisco also participated, bringing the total equity investment in the round to $64.6 million.

Hercules Technology Growth Capital Inc. of Palo Alto put up an additional $20 million in debt financing. 

Glam founder and CEO Samir Arora said the company targeted the round at about $50 million in equity and $10 million in debt; it raised the ceiling based on investors’ appetites. Arora confirmed that its bankers had circulated documents informally last summer for a round of as much as $200 million, but Accel Partners’ general partner, Theresia Ranzetta, said that Glam’s board never approved a sum of that size, and the company began official fundraising in September for the more modest amount.

Although Glam would not disclose pricing on the new investment, a source close to deal put the post-money valuation at close to $500 million, and Arora said the round was sized based on the company’s needs.

“We had announced earlier that we would be very close to Ebitda profits this quarter, and we don’t need a lot of working capital for the core business, but we felt that we should use the fact that we are No. 1 in global reach to women to grow the company globally and to add technology in display advertising and ad serving,” Arora said. “Those two will be the priorities, but we also may do some M&A of core content companies and advertising networks.”

Glam claims to be the leading online publisher of content for women, with 44 million global unique monthly visitors according to comScore MediaMetrix, but some commentators have criticized the claim because unlike the other leading women’s content publisher, iVillage, a subsidiary of New York-based NBC Universal Inc., it claims the traffic of participants in its advertising network.

The company operates an ad network that syndicates content and resells ads for independent women’s blogs that agree to share revenue and sign over their comScore traffic to Glam Media, which some have criticized as merely a search engine optimization (SEO) gimmick to trick advert
isers.

The distinction is increasingly irrelevant, however, as models for online publishing evolve, and Glam investors believe the company has hit on a particularly attractive model that has fueled rapid growth.

“Samir is a genius, and Glam is redefining media,” said Tim Draper, managing partner of Draper Fisher Jurvetson, in an e-mail interview. “The idea of consolidating all the media sources around women is brilliant.”

Draper said Glam’s combination of allowing bloggers to monetize content and offering advertisers a dominant avenue to high-end women consumers provides it a unique position in the industry, and that Burda’s investment is a validation of the model.

Arora said the company was looking to add a strategic investor in the deal, and that as a $2.4 billion international media group and leader among traditional women’s content publishers in Germany and other European markets, Burda will provide key strategic contacts as well as content.

Arora said the company’s business model aims for a balance of internal content and content from partners similar to Mountain View, Calif.-based Google Inc.’s 35%-65% split. The company will work to maintain this “steady state” balance as it grows, he added, and that may require aggressive acquisitions of current partners as traffic with new partners increases.

“I don’t believe we need to be a content company to be a media company, and I don’t want to get into bad habits,” Arora said. “But I believe you should fund companies in high-growth mode, and there are two types of deals; fear of competition deals, and revenue and Ebitda deals–and I am a firm believer in both.”

Arora said Glam is unlikely to raise additional private equity, but it expects to expand its debt facility to $50 million or more to finance additional growth as revenues grow. He said the company is not seeking a quick exit in the public markets, adding that he did not anticipate taking the company public at least until it reaches a critical mass in two or three years.

In putting the investment round together, Glam worked with bankers Jim McVeigh and Ed Chiang of Banc of America Securities LLC and John Griffen of Allen & Co., all of New York, and with Emmanuel DeSousa of Deutsche Bank Securites Inc. in Menlo Park. For legal work, Glam hired deal from Alan Kalin of Bingham McCutchen LLP in Palo Alto. — Clifford Carlsen

 

Posted in Social Media | No Comments »

jeffpalumbo

Prediction: Facebook will be the largest social network in the world

Thursday, November 20th, 2008

I saw history in the making today.

For some reason, I was lucky enough to be in San Francisco for the Facebook f8 Platform launch event. This announcement was at least an 8.0 on the Richter scale. It was a whopper.

In fact, I haven’t come away from an event so excited since September 21, 1995, after attending the Online Developers II conference, also in San Francisco, when it hit me that my CD ROM publishing days were ending, and that I would soon become an internet entrepreneur. In the next five years, our team quickly shifted from publishing to online, launched Ancestry.com and MyFamily.com, and then went on to raise $90 million, acquire Rootsweb (and later Family Tree Maker / Genealogy.com) starting what has since become the largest genealogy company in the world. (Note: I left the company in Feb 2002 and have recently started a competing firm, with two properties: WorldVitalRecords.com and FamilyLink.com)

For me, that journey all started at Online Developers II.

That story doesn’t necessarily have a happy ending for any of the company’s founders or even its early employees or investors. Like Ray Noorda used to say, “Finders Keepers, Founders Weepers.” Crossing The Chasm by Geoffrey Moore explains why pioneers (company founders and innovators) don’t often do well in the end, while settlers (who are usually better are operations) do. I’m actually fine with that, and reading that in Moore’s book was one of a dozen things that helped me move on emotionally.

Today felt just like September 1995 to me.

And it makes me wonder what the next 10 years might bring.

I sat on the third row and drank deeply of the kool-aid as Mark Zuckerberg, who turned 23 years old just 11 days ago, presented what may be the best business opportunity for internet entrepreneurs in the past ten years.

A huge new opportunity was presented to the few hundred people in the room, including 65 companies that have spent the last few weeks developing applications for the launch of Facebook Platform.

Facebook is inviting anyone to develop applications for their users on top of what Mark calls their “social graph”–the core of their service which basically keeps track of real people and their real connections to each other.

Facebook has 24 million active users (meaning they’ve used the site in the last 30 days–I like how they aren’t overstating numbers like SecondLife) and 50% of them login each day. Mark says the next most active social network is not more than 15%.

Last fall as I taught Internet Marketing at BYU we learned that a UCLA survey showed that 50% of college age females said Facebook was their #1 most important web site (even more than Google, Wikipedia, or anything else) and that 1/3 of college age males said it was their #1.

Look how many “addicts” Facebook has, according to Quantcast. 63% of visits are from addicts. eBay is only 56%.

Facebook is adding 100,0
00 new users per day. That’s 3% growth per month. And the fastest growing segment is over age 25. At this rate, they’ll have 50 million users by the end of this year, and 75% of them will be out of college. I read just on paidcontent.org that social-net-users/”>Facebook is the fastest growing social network in the UK, and today Mark said that 10% of Canada’s population is using it.

With 40 billion pages view per month, Facebook has passed eBay in page views, and is now in 6th place, just behind Google.

So this is no small thing for a 3 year old web site. Facebook is absolutely for real. I like Facebook a lot; while I can’t stand MySpace. Facebook is clean and nicely designed and architected. MySpace in my opinion is messy and mostly full of garbage. Facebook is a real social network for real people. And it is really, really popular.

And it’s growth will be dramatically accelerated by the Platform announcement. If Facebook is adding 100,000 new users per day with its own few simple applications (like its photo sharing, a very simple service that has given Facebook twice as many photos as all other photo sharing sites combined), what will happen when thousands or tens of thousands of developers start building apps in Facebook and marketing them to more users?

Facebook will reach 50 million, then 100 million, then 200 million users, and beyond.

Rather than continue to try to develop features within its own proprietary, closed network, basically keeping all of its users to itself (and kicking out widgets they don’t like, like MySpace does), Facebook intuitively gets the concepts that are so brilliantly discussed in Wikinomics (which are so non-intuitive to old school business types), and has chosen to open up its network for all to participate in. Because they embrace the winning philosophy, they will win.

Application developers can now have access to core Facebook features, such as user profiles and user connections, and even publishing to the News Feed, all with the control and permission of Facebook users. So if a Facebook user chooses your app, it will show up on their profile for all their friends to see, and they can enable that app with a single click, and so your application can spread virally to the 24 million other users.

When Facebook has 100 million users, in the not too distant future, having the ability to develop an App in their system will almost be like being able to get a link on Google’s own home page.

Can you imagine Google ever doing that? No way. They have too much at stake. Their $147 billion market cap couldn’t take it. Google’s philosophy was to not be evil. But I think Facebook’s philosophy is a decade fresher and even more in line with where things need to go than even Google–a company that I admire more than any other.

When Clayton Christenson spoke at the first Open Source Business Conference (again in San Francisco) about three years ago, he spoke about how the LAMP stack has provided a powerful low-cost platform for companies to develop applications on top of. Linux, Apache, MySQL, and PHP enable companies to develop applications that used to cost millions, but by building on top of all these projects, companies could move “up the stack” and focus on providing unique value that wasn’t in the stack already.

There are more and more free layers being added to the stack all the time, powerful services that can be embedded in your own new applications, like Skype, Maps from Google or Microsoft, storage and utility computing from Amazon, and video layers like YouTube and Google Video.

When anyone develops an application on top of the LAMP stack, like a CRM system for example, they always risk being disrupted by someone who provides that for free on top of the already existing stack.

Any new open source application or creative commons layer can be added to the stack, which might commoditize that application and put some companies out of business, but then that enables everyone else to again add more value on top of the stack.

This process continues, and all the while the consumer benefits greatly, and developers can continue developing innovative and valuable services on top of the ever-growing application stack.

The way I view the Facebook Platform announcement is this: the LAMP stack has just been extended by the huge and growing “social graph” that Facebook is opening up to the world. (It’s not completely open, because you have to develop apps within Facebook, but it’s a start in the right direction.)

Now, instead of application developers having to each build their own web site and try to get people to find it and use it and share it, the viral marketing of any good application site will come right from the Facebook interface itself. As users adopt new apps, they will spread quickly through the network.

Mark made three big announcements. 1) Applications can be deeply integrated with Facebook 2) Distribution of the applications will occur through the network, and 3) The business opportunity Facebook is providing will give 100% of advertising revenue (for third party applications) and 100% of transaction revenue to the application developers.

Now that is the true spirit of Wikinomics.

VPs from Microsoft and Amazon were present to expres
s their support for the Facebook Platform. Microsoft will enable application develop with Silverlight and Popfly, and Amazon discussed how its web services enable Facebook Platform apps.

The CEO of Slide mentioned that the Platform developer wins big, but that applications developers also have a huge business opportunity here.

Microsoft’s market cap is $280 billion. But the top three application developers on Microsoft’s platform have a combined market cap of $40 billion.

I don’t think Facebook’s market cap vs it’s application developers will be nearly that lopsided. In fact, the way they are treating their own applications versus Platform applications makes it a pretty level playing field. Facebook users can deselect apps they don’t want to use–even Facebook’s own apps–and sign up to any other.

The core asset Facebook wants to own, extend, and leverage, is the social graph–who is connected to whom.

It is even possible that some future Facebook app developers could end up with a greater market cap than Facebook–if they permanently maintain the 100% of revenue going to the partner model. For example, a MMORP game built into Facebook might someday have 10 million users paying $10 per month, or $1 billion in revenue, when Facebook might at that point have $500 million in advertising revenue. (Reportedly it will make $150 million this year.)

Okay, not likely, but maybe possible.

The cool thing is that the marketing costs for these application developers will be basically nothing. All viral. All courtesy of Facebook’s users.

One of the self-serving reasons why companies like Google and Amazon create so many APIs and web services is to get a vast community of developers doing R&D for them and prototyping applications to see what works best. Then, they acquire the ones the like best.

Facebook will certainly be in a strong position, once it has a liquid currency, to acquire some of the most interesting application developers using its Platform.

If you haven’t read it recently, read Chapter 7 of Wikinomics, “Platforms for Participation” in the context of today’s announcement.

Here are a couple quotes.

“The winners in this evolution will be companies that can create the most comprehensive incentive frameworks to adequately reward all stakeholders.” (p. 207)

How about letting them keep 100% of their ad and transaction revenue? That’s quite an incentive.

“Winning in a world of cocreation and combinatorial innovation is all about building a loyal base of innovators that make your ecosystem stronger.” (p. 210)

Like I said at the beginning, I felt very lucky to be invited to this event. I got the invitation because we invested in YackPack last year, which is one of the companies that is launching its application within Facebook.

I didn’t see anyone else from Utah there, partly because every internet entrepreneur and marketer in the state was probably attending Seth Godin’s speech in Salt Lake City, which was probably very good.

If you are from Utah and went to the Facebook f8 event, please comment here or email me. I really want to connect. I think we need a Facebook Platform Developer Community here in Utah.

I searched LinkedIn tonight and found 140 Facebook employees, board members, etc, on LinkedIn. I’m 2 degrees away from many of them. But then I searched for “facebook api” to see how many people in my 2 million + network have any experience developing for Facebook and only 1 person came up.

Hopefully there will be some developer forums that emerge quickly so that more people can get guidance on how to proceed.

So here is my final thought. I’ve been pretty fortunate in my career to kind of see the big waves and trends coming and to get positioned to take advantage of them. I think I have pretty good instincts, because my brother Curt taught me to read everything (and he buys me new books from Amazon almost every month) and to go to conferences all the time. I already mentioned the transition from CD ROM publisher to Internet Publisher. After reading Net.Gain in 1998, we created Ancestry.com’s user generated content strategy (it became our most popular database) and launched MyFamily.com which was really an early social network for families. At our peak we were adding 20-30,000 new users per day. Unfortunately, our investors stopped supporting that free site because it wasn’t making money. Doh.

After reading an article in Industry Standard in 1998, I decided to attend the first ever affiliate summit held in New York City, where Commission Junction, Be Free, and LinkShare all presented. We chose Be Free, launched our affiliate program, and over the next few years, affiliate marketing was our #1 source of new customers at Ancestry.com.

In the last few years, I bl
ogged before Google’s IPO that it would disrupt Microsoft by offering free software (including Office apps) and said it will one day pass Microsoft in market cap. And, more recently, in my latest example of prescience, allen.net/2006/10/16/better-than-rocketboom/”>I blogged about Lindsay Campbell of Wallstrip after her first day as anchor, and suggested that she might one day rank up there with Soledad O’Brian and Diana Sawyer, and now CBS paid $5 million for Wallstrip, and Lindsay’s career will soar. Way to go, Lindsay!

The only reason I’m reciting these past predictions is to try to lend a little weight to my next prediction: that Facebook will become the #1 social network worldwide (and the first to get 1 billion users–I love Facebook mobile, by the way) and that thousands of entrepreneurs will become extremely successful by developing to this new platform.

I hope that Facebook won’t be acquired. I hope it will go public and become the next major Internet company along with Google, Yahoo, Amazon and eBay. Another hugely profitable company that can potentially acquire lots of other great smaller companies.

I like Mark Zuckerberg a lot. I met him tonight as he was just visiting with lots of the individual companies supporting the launch event, and thanking them for their support. He was very genuine. I can see him in 10 years with the influence of the Google founders and in 20 years with the influence of Bill Gates. He is just getting started. At the recent Startup School, he advised startups to hire coders — even in the marketing department — and he talked about time he spends thinking about philosophies and how at this young age his life is not cluttered with things and family responsibilities.

Can you imagine in a couple years when Facebook has 200 million users worldwide, with half of them logging in every day, and a 25 year old will be CEO of this company? I can’t think of a parallel in world history where someone this young had this much influence. Oh wait. Alexander the Great.

Ok. I’ll stop now. It’s 2:40 am. And my post is going on and on and on, and all over the place.

But I’m serious about this Facebook Platform. Check it out. Mark’s philosophy of openness is an open invitation to co-create something remarkable with him and his 24 million users.

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jeffpalumbo

London trumps Toronto as centre of Facebook universe

Thursday, November 20th, 2008

It may be the largest city in Canada and the centre of the universe to some, but when it comes to Facebook.com, Toronto can only say it’s second best.

Some time last week, London, England leapfrogged the Big Smoke and stole the crown for top geographic network on Facebook. According to statistics from the popular social networking destination ending Monday, slightly less than 810,000 Londoners have signed up to Facebook, while Toronto lagged far behind with 705,000 users.

Facebook senior communications manager Matt Hicks admits he can’t give a specific reason to why London shot past Toronto, but said that both cities’ growth rates are in line with the company’s worldwide user base.

“Canada overall does continue to grow rapidly for Facebook, at about 4 per cent a week and the Toronto network is growing similarly,” Mr. Hicks said in an e-mail.

Although Torontonians may not be the darling of Facebook any more, they are a large part of the nationwide contingent that visits the site in droves. Facebook says that Canadians account for more than 10 per cent of the site’s total population and according to web measurement firm ComScore, in June 2007, 11.4 million Canadians logged onto Facebook, compared with only 343,000 in the same period last year.

Once a social networking haven for college students, Facebook’s decision to open registration to all users in Sept., 2006 has helped attract new visitors from outside the 18-to-24 year-old demographic. Once registered on the site, users can chat with friends, upload photos and place free classified advertisements.

The popularity of the website hasn’t gone unnoticed by provincial officials.

Last May, the provincial government blocked Facebook access to employees, MPPs, and cabinet ministers on government computers. The OPP also uses Facebook regularly to keep an eye out for underage drinking parties and four high school students at Toronto’s Birchmount Park Collegiate were arrested last March following a Facebook-related protest.

October 23 2007

For the last several years, Yahoo, MSN and AOL have all suffered a declining share of pageviews, but that does not mean the portal is going out of style. Rather it has been redefined, first by Google, and now by Facebook in potentially even more profound ways.

The core question a portal needs to answer for a user is “How do I find the information I need?”

In the early days of the web, the answer was browsing, which made sense when there were a limited number of useful sites. (Remember when it was a big deal for Yahoo to put the “New!” or “Recommended” icon next to a website’s name in their directory?) But as the number of websites became infinite, search replaced browsing as the dominant paradigm for finding new sites, and Yahoo’s failure to keep up in this area allowed Google to take the lead.

Google has continued to leverage its lead in search to become a full-fledged portal. Once users have found what they are looking for, Google makes it easy, through their iGoogle product, to subscribe to that content through alerts, RSS feeds, or a huge selection of widgets, all of which are compacting more useful information onto fewer start pages than ever before. As a result, iGoogle has become Google’s fastest-growing product. But iGoogle has a serious limitation: it doesn’t involve sharing; each user has to make an individual investment in set-up and can’t benefit from the work of others. It’s not really a Web 2.0 product.

evoportal.png th="560" border="0" height="182" />

Facebook has a new answer to the portal question. The “social graph,” or your network of relationships, will push information to you. You’ll learn from your friends. Thanks to Facebook’s new developer platform, the types of information being disseminated now include not just news, photos, events, and groups but also music, videos, books, movies, causes, political campaigns — and the list is rapidly growing into almost every conceivable category.

The advantage of this approach is that it makes it relatively effortless for users to access a world of information that is both increasingly comprehensive and personal to them. Even if all this information were available through search (and it’s not), search actually requires work; the user must know what they’re looking for and type it in. Then they must parse the results to determine which are valuable, labor which is not shared and reused by others. By contrast, Facebook requires no work once your network is set up. Your friends push information to you that is likely to be useful, and if not you can tune your preferences until it is. Facebook promises a kind of Socratic knowledge: it tells users things they didn’t even think to ask.

While the process of structuring new kinds of information for the social graph to distribute is still sorting itself out, it is easy to object to the frivolity of information on Facebook. For example, Facebook is great at telling me what my friends just had for lunch, but how about hard news? Well, for starters, I’m waiting for the Digg application to not only display articles I’ve digged on my profile, but also to aggregate all the articles dugg by my friends. This could lead to the kind of social news site that MySpace promised but failed to deliver.

Not only Digg, but virtually all Web 2.0 applications which are based on the wisdom of crowds can be reconceived as Facebook apps based on the wisdom (or trust) of friends. To the extent that these services cater to publishers who seek a mass audience, such as YouTube or Flickr, the social graph will not threaten their business. But to the extent they publish content intended for friends, or if the value of their service increases with the participation of friends, these applications face only two choices: get each user to recreate his or her friendship network on their own site or migrate their service to the Facebook platform lest someone else does it first.

The potential for Facebook to layer on any feature whose value increases with the participation of friends is an incredibly broad canvas for a portal. Moreover, as each new application gains acceptance, it enriches the overall value of the network and makes it incrementally more likely that the next application will be tried. Much of what we know as “Web 2.0″ will eventually be rebuilt on top of Facebook.

To be clear, the social graph will not replace search, in the same way that search did not replace browsing. And search may still be more easily monetized than the social graph. Still, as a basis for a portal, neither Google nor Yahoo has anything nearly as cohesive holding its properties together. Google can layer on any feature where search is paramount, which is hugely valuable, but as it expands beyond this core competency, it becomes increasingly hard to press its advantages into new areas. Yahoo already seems to have reached the limits of its far-flung empire, eliminating redundant operations such as Yahoo Photos.

In my view this is a misdiagnosis of what ails Yahoo. The problem is not too much peanut butter (i.e. that it’s spread too thinly). The problem is the bread at the core. Browsing plus second-tier search is not sturdy enough to hold everything together. The new portals are defined by the quality of their bread, not their peanut butter.

Yahoo was right to focus on an acquisition of Facebook but not for the reason it thinks. In its view of the world, Facebook is just another media property, a particularly fast-growing and sticky one to be sure, but ultimately just more peanut butter. In reality, Facebook’s social graph could have provided the bread to connect Yahoo’s far-flung empire.

But what would be in such a deal for Facebook? They will have their own empire soon enough.

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jeffpalumbo

Facebook and The Myth Of Contextual Advertising

Thursday, November 20th, 2008


There is a myth floating around that contextual advertising is going to help Facebook justify its $15 billion valuation. The myth goes something like this: because Facebook knows everything about us, it will always be able to serve perfect ads. However, the reality is more like the following:

·         Facebook does not know much about us

·         The data that Facebook has is not structured

·         People are not coming to Facebook to click ads

And even if all of the above were reversed, building a contextual advertising engine is far from simple - anyone who tries faces the same problem as building a personalized recommendation engine. In an earlier post on this blog, we discussed various ways that such systems work. The best example is Amazon, which uses a mix of many techniques to deliver recommendations, and took a decade to build and fine tune it to the point it is at today. So what basis is there to think that Facebook can do the same? Let’s take a more in depth look at Facebook’s advertising play.

How much does Fa
cebook really know about you?

A typical Facebook profile contains basic personal information - name, home town, date of birth and relationship status. Another section shows education and job history, and the rest of the profile is generally applications ranging from photos, to movies, to games, and other random stuff that people find interesting. So how much information is there for Facebook to use?

Very little actually. The site does not really know what I like. It does not know my book tastes, does not know that I am running a startup, does not know that I like Cabs and Pinots. It does not know that I am a Netflix user, that I am increasingly less tolerant of cold weather, or that I have 3 beautiful little daughters.

So Facebook does not really know sophisticated things about me. But even basic information that it ought to know is beyond its grasp. For example, if I add the Flixtster application and start displaying movies that I’ve rated on my profile you’d think that Facebook would learn that I like movies. But it wouldn’t. Facebook’s system has no idea that the Flixster application is about movies and has no idea what kind of movies are being displayed.

The Facebook platform is designed to be flexible and pluggable, but it lacks meta data about the content of the applications. So all the information that is being displayed on our profiles can not become an input into a contextual advertising engine. At least not easily. Of course Facebook can design an algorithm that runs and analyzes text in the profile pages, but such system would not be very good because a lot of guessing would have to happen. What would work, is to let each application deliver ads. Since applications know their own content, app developers know which ads are relevant. But it is unlikely that Facebook would ever go for that, since their whole play is to control the ads.

What ads are we getting today?

The ads that we get served on Facebook today are the direct result of the lack of understanding of its users. Not surprisingly, most ads are about dating. After all, if this works web wide, why not do it on Facebook? But most of the ads that I have seen are either laughable or down right offensive. Consider the one below:

Um… Didn’t I say on my profile that I am married? Okay fine, but even if I was looking, I would not want my THE ONE to look like this. Would you? Jokes aside, the advertisement below, which was displayed on my company AdaptiveBlue’s user group, is just completely inappropriate:

This sort of thing can cost us users, some of whom may not even realize that this is an advertisement. All they know is that they are looking at AdaptiveBlue’s Facebook group and could draw misinformed conclusions.

In addition to the ads in the sidebar, Facebook is now showing advertising in the newsfeed. I understand that they want to monetize the site, but this is just really confusing. We have been trained that the news feed shows updates from our friends. This is the place that we are directed to first each time we log in to the site, and having ads there simply creates a bad user experience. Not to mention that I am a happy Netflix customer so the Blockbuster ad that I was shown did not entice me — again, Facebook doesn’t know as much about me as you might believe.

How effective are the ads on social networks?

So at least today the ads are not relevant and we are yet to see how exactly Facebook is going to learn about us. But there is also another problem, a bigger problem which is broader than just Facebook. The question is how effective will the ads be on social networks? On the surface, it’s a no-brainer: every site that has traffic makes money on ads, right? But there’s more to the story than just the surface.

The most effective ad play online is, of course, Google. Its big because its model is pay-per-click (CPC). That is, advertisers only pay if users actually click through to the site. Of all Google’s offerings the most successful one is Google AdWords, in which contextually relevant ads are displayed on top of search results. It is so successful because a search represents intent, so users are more likely to click on ads that advertise things they are clearly actively looking for.

Most portals, media sites and social networks use a different model, based on impressions (CPM). That is they charge advertisers for each time an ad is shown, regardless of whether the user clicks. Naturally, these ads are much cheaper. And herein lies the big issue: If on social networks people do not click on ads, then the only type of ad they can possibly sell are impression based.

Right now, people are using social networks to socialize and browse, they are not actively searching for products and deals and likely, CPC would not be effective. It is still too early to tell, of course, but Fred Wilson, who writes the popular ‘AVC’ blog, created an ad for his firm, Union Square Ventures that illustrates, anecdotally, that users on Facebook are not interested in ads. The ad got practically no clicks, which is curious, because Fred Wilson and his firm are quite famous in tech circles and the ads were targeted at 32,000 Facebook users who declared an interest in technology.

Conclusion

As it stands, Facebook does not know all that much about us, and the ads that we are shown are not relevant as a result. The jury is still out on whether social networks can get big via highly targeted advertising. Early trials have shown that CPC is not a likely route and CPM plays are just not as interesting. Yet, Facebook is certainly very aggressively pushing for monetization, likely in preparation for a future IPO. Will they be able to turn it all around and re-invent contextual advertising? The company is full of brilliant people so it’s certainly possible, but so far it does not look impressive.

What do you think about advertising opportunities on social networks? What kind of plays do you see possible and what do you think about current Facebook ads?


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jeffpalumbo

Why So Many Want to Create Facebook Applications

Thursday, November 20th, 2008


Why So Many Want to Create Facebook Applications

Site’s Growing Ranks Seen as Potential Source Of Revenue, Customers

Another online gold rush is on. Entrepreneurs are scrambling to create small software programs for Facebook Inc.’s social-networking site and grab footholds in its emerging economy.

Three months ago, the Palo Alto, Calif., company invited software developers to create applications for its site. The response was immediate: Facebook says more than 70,000 developers, from college kids to big-corporation engineers, have signed up for the tools needed to build the free applications.

PROFILE BOOSTERS

 

•  What’s New: A growing number of entrepreneurs are creating software programs that allow users of social- networking site Facebook to dress up their profile pages.

•  The Uses: Some applications allow people to share reviews on, say, a book, movie, vacation spot or outfit. Others send virtual presents and play games.

•  The Potential: To capitalize on the revenue potential, some firms sell advertising, while others promote their products and services on Web pages shown to users of their applications.

Meanwhile, Facebook members are energetically embracing the applications. They use them to dress up their profile pages with everything from maps showing what countries they’ve visited to outfits from a retail site to favorite YouTube videos. They send virtual cocktails and gifts to each other, share reviews of favorite books and movies, and play poker together among myriad other things. So far, Facebook says, there are some 2,000 applications on the site that regularly attract more than 100 users, and quite a few other programs, including the games and reviews, that entertain tens of thousands of devotees daily.

Many of the developers of these applications are entrepreneurs looking to start new businesses while others are expanding existing ones. And the applications, which are inexpensive to create, have the potential to become a large source of revenue and customers for those companies that can successfully mine Facebook’s 30-million-strong community. To that end, companies are using a host of business models. Some, for instance, are selling advertising around the applications, while others promote their own products and services on Web pages shown to users of their applications.

“This is a watershed event that is going to affect business and technology for many years,” much the way Microsoft Corp.’s Windows operating system did, says Rodney Rumford, editor and publisher of FaceReviews.com, a Solana Beach, Calif., company that reviews Facebook applications online and provides consulting and application-development services. “It’s a tool for people to discover [businesses] in a way they couldn’t be discovered before.”

Promising Platform

The applications are garnering a big buzz
among Web companies and venture capitalists alike. Menlo Park, Calif.-based venture firm Bay Partners has raised $300 million specifically for companies developing Facebook applications and is making $25,000 to $250,000 investments per application. “All Internet companies need a Facebook strategy or a presence on Facebook,” says Partner Salil Deshpande, because Facebook usership is growing so quickly.

Indeed, Facebook’s monthly visitor numbers doubled to 30.6 million in July from six months earlier, according to measurement firm comScore Networks Inc. That growth has been propelled by a mass movement onto the site since Facebook opened itself to nonuniversity email-address holders.

The Facebook platform is so promising in part because its members use it to connect with people they know — or want to know — in the nonvirtual world. Unlike News Corp.’s MySpace and most other social-networking sites, Facebook members aren’t anonymous. They use their real names and connect with each other to the degree they choose. Facebook also allows businesses to interact with Facebook users fairly freely, while restricting access to any personal data.

“They make it a safe place for communication and for doing business,” says Lee Lorenzen, chief executive of Altura Ventures LLC, a Monterey, Calif., firm that also is funding application creators and has purchased several applications.

“We’re certainly pleased with how much it’s taken off,” say Brandee Barker, a spokeswoman for Facebook. “We already have a thriving ecosystem of businesses built on the Facebook platform.”

Getting More Sophisticated

Applications are easy to create. Developers build, test and debug their applications and, when they’re done, submit them to Facebook for review and testing. If approved, Facebook simply turns them on.

The first wave of Facebook applications were simple and designed to win over large numbers of people. For instance, more than two million users have been recruited by their friends to put cartoons of ninjas and pirates on their profile pages, thanks to a contest created by a trio of developers.

[photo]

A sample of a ShopStyle application that was added to a Facebook profile page.

But the new entrepreneurs entering the arena are bringing with them applications that are more sophisticated and can engage users more often and for longer periods of time. To do so, they try to harness the connections that link its members, or what has become known as Facebook’s “social graph.”

Take “Neighbors,” an application launched four weeks ago by Point2 Technologies Inc., a Vancouver-based company that operates a Web-based real-estate listing service called Point2 NLS. The application uses the company’s broker-defined neighborhood system to help Facebook members meet other people who live near them and share local information and photos. It also shows properties for sale in the neighborhood from any of Point2’s broker and agent members, which the company says number about 140,000 in 86 countries.

“We’re trying to help these real-estate professionals connect to the Facebook community,” says Brendan King, Point2’s chief operating officer.

“My Style,” which was created in June by online-shopping site ShopStyle Inc., lets Facebook’s fashionistas place on their profile pages pictures of items they like from the retailer’s site, such as Oscar de la Renta dresses. Los Altos, Calif.-based ShopStyle.com, which debuted in February, sells brand-name products from about 100 retailers.

“Our aim is getting more people involved in the ShopStyle community,” says Andy Moss, the company’s founder and CEO. He says ShopStyle.com has gotten 5,000 of the 25,000 members of its own fashion-focused community from Facebook, but it remains unclear whether the application will successfully drive product purchases.

Help Getting Away

One application helps people plan real getaways. SideStep Inc., a Santa Clara, Calif., travel search-engine provider, launched its “Trips” application eight weeks ago to help friends and families organize vacations. The application, which SideStep says has about a quarter million users and cost $10,000 or $20,000 to build, provides a place where groups can set travel dates, create itineraries and post messages to each other.

Less than two weeks ago, SideStep added a search box to its application, which, the company says, now drives 2,000 visits to its site each day — where people can search for airplane tickets, hotels and rental cars. SideStep plans to enhance the application and, eventually, show some targeted ads.

Another popular application, “Visual Bookshelf,” helps Facebook members find new books to read by getting recommendations and reading reviews written by their friends. The application, which is adding 10,000 new users a day, was created by Web-development firm Hungry Machine LLC of Washington, D.C., which operates several Facebook applications and creates others for clients. The application shows ads to Visual Bookshelf users. Also, Hungry Machine has a link to Amazon.com on the application and gets a commission for each book sold through the link.

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